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Petition forces vote on tax subsidy for downtown Wichita hotel

A petition drive has succeeded in forcing a vote on whether the city should tap the bed tax to subsidize a downtown hotel, officials said Monday.

Election Commissioner Tabitha Lehman certified that there are enough signatures to force a vote on $2.25 million of the funding for the Ambassador Hotel project.

Petition organizers, led by the free-market group Americans for Prosperity, needed 2,527 signatures of verified Wichita voters to force a vote on the project.

They gathered 2,719.

“I’m so relieved — I can breathe again,” said Susan Estes, the wife of state Treasurer Ron Estes and the local leader of Americans for Prosperity. “There were a lot of people who worked on this, who believed the public should be involved.”

One of the developers, Paul Coury, said they will review the petition signatures to ensure that there actually were enough to force an election.

If there are, “We’ll just run a campaign,” he said.

Others in the development group include Wichita developer Dave Burk and Dave Wells of Key Construction. Their companies have been involved in various publicly assisted developments, including Old Town and WaterWalk.

Opponents of the Ambassador Hotel incentive collected more than 3,600 signatures, giving them a substantial cushion against the inevitable disallowance of signatures from people who are not eligible voters in a city election.

What is opposed

Specifically, the opponents are seeking to overturn a City Council decision to give developers a share of future guest tax on a $22.5 million, 117-room boutique hotel in the former Union National Bank building at Douglas and Broadway.

The hotel is the centerpiece of the planned Douglas Place project.

Under the development agreement approved by the council, the city would rebate developers 75 percent of the bed tax paid by the hotel’s guests for 15 years.

The subsidy is valued at about $2.25 million. In addition the city plans to spend $7.5 million to build a parking garage and other improvements for the hotel and development expected to take place around it.

Council’s options

City Council members are expected to consider the issue at their meeting Dec. 20.

They have two options: rescind their earlier vote and take away the incentive to the hotel developers, or schedule a citywide election on the question.

Council member Janet Miller, whose district abuts the project, said she thinks the council will stand by its earlier decision and let the voters decide. If so, the election will be held within the next three months.

She said people who have contacted her have expressed support for the Douglas Place project and for downtown improvement in general.

Miller said the $70 million in projects under way in the area are the real index of “how positively the community feels about what’s happening downtown.”

She also said the 2,527 signatures opponents needed — 10 percent of voters in the last city election — is not a particularly high number.

Estes, however, said getting the petition filed properly and gathering that many signatures is a daunting task, because of the complexity of the process.

“We’ve been taking this one step at a time,” she said. “We really have not had time to discuss what a campaign is going to look like or who’s going to run it.”

Vocal opposition

Members of Americans for Prosperity have been at every recent council meeting where development subsidies have been considered and have frequently spoken in opposition to specific plans and the concept itself.

AFP has its roots in the free-market economic theories promoted by Charles Koch, chairman and chief executive of Koch Industries. The group opposes development incentives as undue government interference, which they say discriminates against business owners in other parts of the city who don’t get subsidies.

That stance dovetails with other AFP priorities, which include eliminating income taxes, reducing regulation on businesses and changing the way commercial property is assessed for tax purposes.

While AFP members oppose virtually all public assistance to business, the Ambassador Hotel project gave them a near-unique opportunity to challenge the council through a vote. Most business incentives aren’t subject to a public referendum, but the hotel project is because it was accomplished through a city charter ordinance.

It also gives the public the rare chance to weigh in specifically on a downtown project and by extension, the future use of subsidies to lure business to the city’s center, Estes said.

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